Question

Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet
Following are the income statements and balance sheets of General Mills, Inc.

Income Statement, Fiscal Years Ended ($ millions)	May 29, 2011	May 30, 2010
Net Sales	$ 14,880.2	$ 14,635.6
Cost of sales	8,926.7	8,835.4
Selling, general and administrative expenses	3,192.0	3,162.7
Divestitures (gain), net	(17.4)	--
Restructuring, impairment, and other exit costs	4.4	31.4
Operating income	2,774.5	2,606.1
Interest, net	346.3	401.6
Earnings before income tax expense and equity in income of affiliates	2,428.2	2,204.5
Income tax expense	721.1	771.2
After-tax earnings from joint ventures	96.4	101.7
Net earnings including noncontrolling interests	1,803.5	1,535.0
Net earnings attributable to noncontrolling interests	5.2	4.5
Net earnings attributable to General Mills	$ 1,798.3	$ 1,530.5

Balance Sheet ($ millions)	May 29, 2011	May 30, 2010
Assets
Cash and cash equivalents	$ 619.6	$ 673.2
Receivables	1,162.3	1,041.6
Inventories	1,609.3	1,344.0
Deferred income taxes	27.3	42.7
Prepaid expenses and other current assets	483.5	378.5
Total current assets	3,902.0	3,480.0
Land, buildings and equipment	3,345.9	3,127.7
Goodwill	6,750.8	6,592.8
Other intangible assets	3,813.3	3,715.0
Other assets	862.5	763.4
Total assets	$ 18,674.5	$ 17,678.9
Liabilities and Equity
Accounts payable	$ 995.1	$ 849.5
Current portion of long-term debt	1,031.3	107.3
Notes payable	311.3	1,050.1
Other current liabilities	1,321.5	1,762.2
Total current liabilities	3,659.2	3,769.1
Long-term debt	5,542.5	5,268.5
Deferred income taxes	1,127.4	874.6
Other liabilities	1,733.2	2,118.7
Total liabilities	12,062.3	12,030.9
Stockholders' equity
Common stock, 754.6 shares issued, $0.10 par value	75.5	75.5
Additional paid-in capital	1,319.8	1,307.1
Retained earnings	9,191.3	8,122.4
Common stock in treasury, at cost, shares of 109.8 and 98.1	(3,210.3)	(2,615.2)
Accumulated other comprehensive loss	(1,010.8)	(1,486.9)
Total shareholders' equity	6,365.5	5,402.9
Noncontrolling interests	246.7	245.1
Total equity	6,612.2	5,648.0
Total Liabilities and Equity	$ 18,674.5	$ 17,678.9

Forecast General Mill's fiscal 2012 income statement using the following relations (assume "no change" for accounts not listed).

Net sales growth	6.0%
Cost of sales/Net sales	60.0%
Selling, general and administrative expenses/Net sales	21.5%
Divestitures (gain), net	$--
Restructuring, impairment, and other exit costs	$--
Interest, net	$346.3
Income tax expense/Pretax income	29.7%
After-tax earnings from joint ventures	$96.4
Net earnings attributable to noncontrolling interests/Net earnings before attribution	0.5%

• Round all answers to one decimal place.

• Do not use negative signs with your answers.

Income Statement, Fiscal Years Ended ($ millions)	2012 Estimated
Net sales	Answer
Cost of goods sold	Answer
Selling, general and administrative expenses	Answer
Divestitures (gain), net	Answer
Restructuring, impairment, and other exit costs	Answer
Operating income	Answer
Interest expense	Answer
Earnings before income tax expense and equity in income of affiliates	Answer
Income tax expense	Answer
Equity in income of affiliates	Answer
Net earnings including noncontrolling interests	Answer
Net earnings attributable to noncontrolling interests	Answer
Net earnings attributable to General Mills	Answer

Forecast General Mill's fiscal 2012 balance sheet using the following relations (assume"no change" for accounts not listed). Assume that all capital expenditures are purchases of land, building and equipment, net. ($ millions).

Receivables/Net sales	7.8%
Inventories/Net sales	10.8%
Deferred income tax/Net sales	0.2%
Prepaid expenses and other current assets/Net sales	3.2%
Other intangible assets	$0 amortization
Other Assets/Net sales	5.8%
Accounts payable/Net sales	6.7%
Other current liabilities/Net sales	8.9%
Current portion of long-term debt	$733.6
Deferred income taxes/Net sales	7.6%
Other liabilities/Net sales	11.6%
Noncontrolling interests	*
Capital expenditures/Net sales	4.4%
Depreciation/Prior year net PPE	20.7%
Dividends/Net income	40.6%
Current maturities of long-term debt in fiscal 2013	$733.6
*increase by net income attributable to noncontrolling interests and assume no dividends

• Round answers to one decimal place.

• Do not negative signs with your answers.

Balance Sheet ($ millions)	2012 Estimated
Assets
Cash and cash equivalents	Answer
Receivables	Answer
Inventories	Answer
Deferred income taxes	Answer
Prepaid expenses and other	Answer
Total current assets	Answer
Land, buildings, and equipment	Answer
Goodwill	Answer
Other intangible assets	Answer
Other assets	Answer
Total assets	Answer
Liabilities and equity
Accounts payable	Answer
Current portion of long-term debt	Answer
Notes payable	Answer
Other current liabilities	Answer
Total current liabilities	Answer
Total long-term debt	Answer
Deferred income taxes	Answer
Other liabilities	Answer
Total liabilities	Answer
Stockholders equity
Common stock	Answer
Additional paid-in capital	Answer
Retained earnings	Answer
Common stock in treasury	Answer
Accumulated other comprehensive loss	Answer
Total shareholders' equity	Answer
Noncontrolling interests	Answer
Total equity	Answer
Total liabilities and Equity	Answer

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Answer 1

Income Statement,
Fiscal Years Ended ($ millions)	2012
Net Sales $ 14,880.2*1.06	$ 15773.01
Cost of sales 15773.01*60%	$ 9463.80
Selling, general and administrative expenses 15773.01*21.5%	$          3,391.19
Divestitures (gain), net	$             (17.40)
Restructuring, impairment, and other exit costs	$                4.40
Operating income	$          2931.02
Interest, net	$            346.30
Earnings before income tax expense and equity in income of affiliates	$ 2584.72
Income tax expense 29.7%	$ 767.66
After-tax earnings from joint ventures	$              96.40
Net earnings including noncontrolling interests	$ 1720.66
Net earnings attributable to noncontrolling interests 0.5%	$ 8.60
Net earnings attributable to General Mills	$ 1712.06

Balance Sheet ($ millions)		2012 Estimated
Assets
Cash & Cash Equivalents		1380.77
Receivables	=$15773.01*7.8%	1230.29
Inventories	=$ 15773.01*10.8%	1703.48
Deferred income taxes	=$ 15773.01*0.2%	31.54
prepaid expenses and others currents assets	=$15773.01*3.2%	504.73
Total Current Assets		4850.81
land, building and equipment		3,345.9
Goodwill		6,750.8
other intangible assets		3,813.3
Other assets	=$15773.01*5.8%	914.83
Total Assets		19675.64
Liabilities and Equity
Accounts Payable	=$15773.01*6.7%	1056.79
Current portion of long term debts		733.6
Notes Payable		311.3
Other Current liabilities	=$15773.01*8.9%	1403.79
Total Current liabilities		3505.48
Total long-term debt	=5542.5-733.6	4808.9
Deferred income taxes	=$15773.01*7.6%	1198.74
Other liabilities	=$15773.01*11.6%	1829.66
Total liabilities		11342.78
Stockholder's Equity
Common Stock		75.5
Additional paid-in Capital		1319.8
Retained Earning	=9191.3+ 1712.06	10903.36
Common Stock in treasury		(3210.3)
Accumulated other comprehensive loss		(1010.8)
Total Shareholder's equity		8077.56
Non-controlling interests	=246.7+8.6	255.3
Total Equity		8332.86
Total liabilities and Equity		19675.64